Dollar dips as euro extends rebound

08:16, January 14, 2011      

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The U.S. dollar fell against major currencies in late New York trading on Thursday, as the euro continued its rebound after solid European debt auctions.

Spain attracted strong demand at an auction of 5-year bonds worth 3 billion euros on Thursday, following Portugal's successful bonds auction a day earlier.

The euro climbed more than 1.5 percent against the dollar to near 1.34, extending its sharp rebound this week.

The European Central Bank (ECB) president, Jean-Claude Trichet, at a news conference after the bank's Governing Council kept interest rates at a record low of 1 percent, said there is " evidence of short-term upward pressure on overall inflation, mainly owing to energy prices."

His remarks drove markets' speculation that the ECB might raise interest rates, helping to uplift the euro.

Meanwhile, U.S. jobless claims jumped to the highest level since October. The Labor Department said the number of Americans filing for first-time unemployment benefits rose unexpectedly to 445,000 from 410,000 last week.

Ben Bernanke, the chairman of the Federal Reserve, said on Thursday that the U.S. economy is strengthening, with three to four percent growth likely this year, but it won't reduce unemployment "at the pace we'd like it to."

The dollar was hurt by the disappointing jobless data and fell broadly against major currencies on Thursday.

In late Thursday trading, the dollar bought 82.74 Japanese yen, comparing with 82.90 late Wednesday, and the euro rose to 1.3350 dollars from 1.3132.

The British pound also rose to 1.5843 dollars from 1.5767. The dollar fell from 0.9671 to 0.9634 against the Swiss franc, but rose to 0.9894 Canadian dollars from 0.9879.

Source: Xinhua
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